Guaranteeing Poverty Alleviation

The Chinese government has vowed to lift all rural residents living below the current poverty line out of poverty and eliminate poverty in all poor counties and regions by the year 2020. This is not only a key building block supporting a moderately prosperous society in all respects but also the inherent requirement of promoting high-quality development in China.

China has positioned poverty alleviation as a crucial step to complete the building of a moderately prosperous society in all respects since the new leadership took office in 2013. According to data released by the State Council Leading Group Office of Poverty Alleviation and Development, by the end of 2019, about 95 percent of China’s poverty-stricken population and more than 90 percent of China’s poverty-stricken counties had been lifted out of poverty. The numbers indicate that the goal set by the Chinese government to eliminate rural poverty by 2020 will be achieved.

Eliminating poverty is the biggest global challenge today. The fundamental reason China has succeeded in poverty reduction is its commitment to a path of poverty alleviation and development with Chinese characteristics. After more than 40 years of reform and opening up, China has accumulated a relatively solid material foundation, with a total GDP of nearly US$14 trillion and per capita GDP of more than US$10,000 in 2019.

In the first four decades of reform, extensive growth of volume led to rapid development of the economy, completing the phased goal of providing the overwhelming majority of Chinese people with adequate food and clothing. However, this mode of economic growth also brought social problems such as environmental pollution and uneven income distribution. More importantly, the old mode could not be sustained for the long term.

To ensure that the goal of eliminating poverty is achieved as scheduled and that no one sinks back into poverty, China must maintain a certain economic growth rate and transform the original extensive growth mode featuring high pollution and high resource consumption into an intensive growth mode characterized by high technology and high added value.

Today, the Chinese government is carrying out a series of policies to promote industrial upgrading and economic restructuring to achieve high-quality development, starting with technological breakthroughs in key areas. China’s success in high-speed rail, telecommunications, pharmaceuticals, electronics and other fields have shown that the country’s high-quality development has achieved concrete results. In 2020, China is poised to make efforts across many aspects to promote high-quality development of the economy to support the fight against poverty.

Last year’s tasks that continue today include accelerating the reform of state-owned enterprises, vigorously supporting the high-quality development of private enterprises and optimizing the business environment. In November 2019, the State Council of China issued a document proposing clear measures and quantifiable indicators for strengthening capital supervision of state-owned enterprises, improving the incentive methods for executives in state-owned enterprises, and enhancing the overall productivity of enterprises to promote high-quality development in state-owned enterprises. At the same time, the constantly optimized business environment facilitates the free flow of production factors and enables more efficient allocation of resources in China to advance the development and growth of private enterprises.

In 2020, the Chinese government will also increase its efforts to accelerate the reform of the capital market, improve the financial system and create more favorable conditions for investment and financing for enterprises to support their long-term development. China will reduce barriers to investment and financing, improve the currency issuance system, accelerate technological innovation and promote the development of high-tech products and services. These measures will greatly promote high-quality development, provide a solid material guarantee for poverty alleviation and create development opportunities for poverty-stricken population.

In the context of high-quality development, coordinated regional development will accelerate poverty alleviation. According to statistics from China’s Ministry of Civil Affairs, 4.71 million people living in extreme poverty received support in 2019. Poverty-stricken areas in China vary widely in development level, creating difficulties for poverty elimination and causing some to fall back into poverty. As the government increases investment, measures should be taken in light of local conditions to establish a long-term mechanism for poverty alleviation. An inclusive financial system and strengthened financial services should support small and micro enterprises, especially in rural areas and remote areas. Targeted financial measures for poverty alleviation should be promoted, and development of green finance encouraged. Development depends on talent. Favorable conditions should be created to attract more young people with knowledge, open minds and enthusiasm to serve the rural areas and help the poor rise out of poverty. 

Bian Yongzu is deputy director of the Industry Department of Chongyang Institute for Financial Studies at Renmin University of China. Cao Ruonan is a research intern with the Chongyang Institute for Financial Studies at Renmin University of China.